Take your time inspecting and driving. Be polite but make sure you drive it, back it, cycle the loader a bunch of times. Run the throttle up to pto speed, and keep it there for several minutes. Should not be much visible exhaust, but if there is may not mean anything big - just a little water in fuel. Try the mower, other attachments. Yeah, hook on to them. Just use every feature, and think carefully about the tractor and what feels right and what doesn't. If it were me, I'd read the users manual online, and research other issues with that model. If you are familiar with the tractor from the operators manual, it will be easier to focus on evaluating soundness. At least it would for me. Drive it all the way down the drive and back if he's got the space, several times if it is a short drive. Once it is up to operating temp, park it on concrete or clean gravel and look for leaks. Agree with other posters here that it is likely sound, but why not be thorough?
It is easy to get caught up in the interaction with the seller. I don't mean to be patronizing, just trying to help. Be friendly, and systematically go through everything and ask questions about it. You are not a tire kicker, and it is a big investment, and he's got an hour for a serious buyer. Enjoy the process of checking it out, and if you raise chickens take him a dozen eggs or something. Definitely offer less, that's just part of the program, but I have no clue on values of machines that size. It seems a little high but the tractor market - at least in the ag sector- has stayed strong all along because of high commodity prices. There is an art to getting a good value that is fair for both parties. No harm is starting a little on the low side, but you have to know values to judge that. Depends on how much a couple grand means to you. Have fun with it-